The families of dead pensioners could be hounded by the taxman under Labour's winter fuel payments U-turn, it emerged yesterday.

Downing Street indicated a 'winter fuel death tax' could be introduced after announcing that millions of pensioners stripped of the subsidy will get it back from this winter.

It is understood that the model currently most favoured for restoring the subsidy is to pay it to all pensioners but claw the money back through higher tax bills from the wealthiest.

This is because means-testing the payments is viewed as too complex.

However, there are concerns about the time period of at least six months between receiving the subsidy and it being declared or clawed back at the end of the tax year.